Does socially responsible investing make
any difference? This was the question addressed by former secretary
of labor Robert Reich in a Sayles Hall talk he gave to kick off a
September conference on the subject. The conference was presented as
part of the ongoing Stephen Robert ’62 Initiative for the Study
of Values.

“Do I
want [the retirement investor] TIAA-CREF to maximize the value of the
returns on my shares?” he asked the audience of about eighty
students and faculty members. “Yes, of course I do. But at the
same time there is a part of my brain that doesn’t want a
company to treat its workers badly.”

Reich, who
was appointed to the labor post by President Clinton, outlined the
ways in which investors try to be socially responsible. Some people,
he said, simply don’t buy shares in companies whose policies or
products they find morally repugnant. “That’s an
appropriate thing for people to do,” he acknowledged, but
“it’s not going to change corporate behavior.” Other
investors use their shareholder status to pressure corporations to
change their ways. However, Reich noted, companies are more likely to
respond to pressure from the public than from small
investors.

A better
weapon, Reich argued, is to enact laws that create incentives for
companies to be good citizens. He admitted, however, that more and
more businesses are hiring lobbyists and using selective campaign
contributions to fight such laws—overwhelming and distorting the
political system with money. In the end Reich suggested countering
such tactics by demanding campaign finance reform laws. Such laws, he
argued, are the first step in correcting the imbalance of power that
now exists between the ability of corporations and individuals to
effect political change.

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The Brown Alumni Magazine is published bimonthly, in print since 1900.